NEW YORK, Jan. 25, 2017 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Novo Nordisk A/S (“Novo Nordisk” or the “Company”) (NYSE: NVO ) and certain of its officers. The class action, filed in United States District Court, District of New Jersey, and docketed under 17-cv-00506, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired Nordisk American Depositary Receipts (“ADRs”) between February 5, 2015 and October 27, 2016, inclusive (the “Class Period”), seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.
If you are a shareholder who purchased Novo Nordisk securities during the Class Period, you have until March 13, 2017 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com . To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
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Novo Nordisk is a Danish multinational pharmaceutical company with production facilities in eight countries, and affiliates or offices in 75 countries. Novo Nordisk manufactures and markets pharmaceutical products and services. In particular, Novo Nordisk is the world’s largest insulin-maker and provider of medicines and devices for diabetes and obesity. The Company makes several drugs under various brand names, including Levemir, NovoLog, Novolin R, NovoSeven, NovoEight and Victoza.
The Complaint alleges that throughout the Class Period, Defendants reported impressive revenue, operating profit growth and sales growth, and informed investors that the Company would achieve sales and operating profit growth of between 5% and 9% in 2016, as well as 10% operating profit growth over the long-term. All the while, however, Defendants were informed by the company’s US organization and could defer from other data sources that Novo Nordisk’s aggressive pricing model produced unsustainable revenues, and its inflated earnings and profit forecasts concealed the true extent of the pricing pressures the Company was experiencing, yet continued to misrepresent the efficacy of its business model while perpetuating a massive stock buyback program to stabilize its ADR price.
Novo Nordisk first announced its share repurchase program on May 11, 2015 for up to Danish Krone 17.5 billion to be executed during a 12-month period beginning January 30, 2015. The repurchases continued in this back-to-back fashion over the course of 2016 and into the recent 2017 fiscal year.
The Company’s aggressive buyback and stabilization strategy hit a major stumbling block when, on August 2, 2016, Novo Nordisk’s Victoza – a diabetes treatment that dominates its class of drugs – was placed on the exclusion list for at least the second consecutive year by Express Scripts Holding Co. Victoza was placed on the exclusion list mainly due to the Company’s price inflation of the drug. In contrast, Novo Nordisk’s competitors were placed on the preferred list, indicating that the Company refused to concede in pricing negotiations. On this news the Company’s ADR price declined 3.2 percent from $57.05 per share on August 1 to $55.20 per share on August 4, 2016.
Only days later, on August 5, 2016, with the continued formulary exclusion fresh on investors’ minds, Novo Nordisk announced second quarter financial results for the 2016 fiscal year. Therein, the Company reluctantly “narrowed” its forecast for full-year profit growth and said it expected tough competition in the US to pressure prices next year. On this news, the Company’s ADR price declined 14.6 percent from $55.20 per share on August 4 to $47.13 per share on August 8, 2016.
On September 29, 2016, the Company announced that it would be laying off approximately 1,000 of its employees, representing two percent of its total work force, in direct response to the “increasing competition and resistance to high prices for diabetes products in the U.S.” On this news, the Company’s ADR price declined approximately 5 percent from $43.74 per share on September 28 to $41.59 per share on September 30, 2016.
On October 28, 2016, Novo Nordisk announced third quarter financial results for the 2016 fiscal year and again cut its forecast for full-year profit growth and narrowed its sales and operating profit outlook from 5 to 6 percent and 5 to 7 percent, respectively.
On October 28 that it had received a Civil Investigative Demand from the U.S. Attorney’s Office for the Southern District of New York seeking information relating to Novo Nordisk’s contracts and business relationships with PBMs concerning its insulin products NovoLog, Novolin, and Levemir.
On this news, the price of Novo Nordisk ADRs declined from a closing share price of $40.94 per share on October 27 to close at $35.54 per share on October 31, 2016.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
CONTACT: Robert S. Willoughby Pomerantz LLP rswilloughby@pomlaw.com
